21. Consider the market for jigsaw puzzles, which provide a delightful way to spend time indoors if you can't leave your home for some reason. a. How will a COVID-19 induced lockdown impact demand, equilibrium price and equilibrium quantity in the jigsaw puzzle market? For full points, explain any demand curve movers and/or shifters affected by the event, display these changes graphically, and analyze the new market equilibrium. b. Assume the event described above has taken place. Puzzle manufacturers expect that this new market demand will remain at its new level for the foreseeable future. Manufacturing companies that did not previously make puzzles noticed this change in demand, and re-allocated their resoureces to begin puzzle production. How will this event impact supply, equilibrium price, and equilibrium quantity in the jigsaw puzzle market? For full points, explain any supply curve movers and/or shifters affected by the event, display these changes graphically, and analyze the new market equilibrium. c. If these events cause larger changes in demand than in supply, what happens to equilibrium price? What if the events cause larger changes in supply than in demand? Use graphs to explain your answers.

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
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21. Consider the market for jigsaw puzzles, which provide a delightful way to spend
time indoors if you can't leave your home for some reason.
a. How will a COVID-19 induced lockdown impact demand, equilibrium price
and equilibrium quantity in the jigsaw puzzle market? For full points, explain
any demand curve movers and/or shifters affected by the event, display these
changes graphically, and analyze the new market equilibrium.
b. Assume the event described above has taken place. Puzzle manufacturers
expect that this new market demand will remain at its new level for the
foreseeable future. Manufacturing companies that did not previously make
puzzles noticed this change in demand, and re-allocated their resources to
begin puzzle production. How will this event impact supply, equilibrium
price, and equilibrium quantity in the jigsaw puzzle market? For full points,
explain any supply curve movers and/or shifters affected by the event,
display these changes graphically, and analyze the new market equilibrium.
c. If these events cause larger changes in demand than in supply, what happens
to equilibrium price? What if the events cause larger changes in supply than
in demand? Use graphs to explain your answers.
Transcribed Image Text:21. Consider the market for jigsaw puzzles, which provide a delightful way to spend time indoors if you can't leave your home for some reason. a. How will a COVID-19 induced lockdown impact demand, equilibrium price and equilibrium quantity in the jigsaw puzzle market? For full points, explain any demand curve movers and/or shifters affected by the event, display these changes graphically, and analyze the new market equilibrium. b. Assume the event described above has taken place. Puzzle manufacturers expect that this new market demand will remain at its new level for the foreseeable future. Manufacturing companies that did not previously make puzzles noticed this change in demand, and re-allocated their resources to begin puzzle production. How will this event impact supply, equilibrium price, and equilibrium quantity in the jigsaw puzzle market? For full points, explain any supply curve movers and/or shifters affected by the event, display these changes graphically, and analyze the new market equilibrium. c. If these events cause larger changes in demand than in supply, what happens to equilibrium price? What if the events cause larger changes in supply than in demand? Use graphs to explain your answers.
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